In preparation for BYD's Q1 earnings on Tuesday we've highlighted management's forward looking commentary from its Q1 conference call and subsequent investor conferences.
TRENDS & OUTLOOK
Business update from Barclay’s conference on 3/26/2010:
- "We really don’t see ‘10 being much different than ‘09."
- "The promotional environment in the Locals business has, I wouldn’t say is still fairly aggressive, but it has become a little more rational (same for the Lake Charles market)."
- "We do need the Strip to recover before we would see a recovery in the Locals business, at least that’s our view right now."
- "In Downtown, we run a very unique business with about 65 to 70% of our customers are from Hawaii. And really, absence of volatility of the fuel that’s associated with that charter, those businesses are very stable and actually growing."
- On LV Locals market, "we continue to see the opportunity for further job losses in the marketplace largely around construction-related jobs unfortunately. Our loyal customers continue to come. Where we’re seeing the largest impact is on unrated customers and customers at the lower end of the radius spectrum. It’s just people are not spending money yet. However, we’re optimistic that our competitors on the Strip are saying, they see forward bookings getting better."
- On Borgata, "I think that we’ll just let MGM run their process and see how it plays out from our perspective. I think we are very happy with our 50% ownership, as I mentioned in our remarks. We don’t see anything wrong with the Atlantic City market, in fact we are quite optimistic. If you look at how the property has performed in this – in one of the most difficult economic and competitive environments it’s in, EBITDA has basically been flat through that period of time. We control our own destiny in terms of table games being introduced in Pennsylvania. The reality is there are a lot of other drivers to that marketplace, that will make it beneficial for Borgata, that is, some of our competitors perhaps may go out of business. There will be some level of economic recovery in the region.
Q4 CONF CALL:
- "Our Las Vegas Locals EBITDA was up by more than 10% from the third quarter. This marks the first sequential quarter-over-quarter improvement in the Locals region in 18 months. This growth pattern is continuing in the first quarter."
- "When we spoke last, we noted that a stabilizing trend was developing in Las Vegas and that we believe we’ve reached the low point in the business cycle."
- "Borgata has already lost three weekends to bad weather so far in the first quarter and we expect to
see an impact on first quarter EBITDA in excess of the 5 million we saw in the fourth quarter."
- "Our covenant steps up in the first quarter of this year to six and three quarters times and continues to increase for each of the next two quarters."
- On adverse weather impact, "I think the weather for the most part in the first quarter moved up the eastern seaboard. So, as odd as it may seem, the Midwest has had a maybe a pretty normal weather."
- On pre-opening expenses run rate, "It will continue to come down. We’re continuing to have expenses to wind down some of the capital costs that were really left over from 2008. Some of that cost is obviously capitalized and goes on the balance sheet and some of that goes into pre-opening expense. But I would say beyond Q1, Q2 timeframe of this year, we would get to a point where we’re probably are on the run rate that you could expect."
- "I think for 2010 we would expect our kind of run rate tax rate to be around 38%."
- "And that correction in the (Southwest LA market), which takes a couple of months to occur, will be a benefit, if you will, as we go towards the end of the first quarter into the second quarter, easing back on marketing expense."
- "But I would say that corporate expense shouldn’t be much different than what you would expect to have
seen from 2009 levels and...I expect 50 to $55 million of maintenance CapEx in 2010."